T.C. Memo. 1996-356
UNITED STATES TAX COURT
PAUL M. KIRIN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9082-88. Filed August 6, 1996.
Larry Kars, for petitioner.
Cheryl B. Harris, for respondent.
MEMORANDUM OPINION
WRIGHT, Judge: This matter is before the Court on
respondent's motion for entry of decision in accordance with a
stipulation of settlement (the stipulation) filed October 11,
1994. We must decide whether the subject decision properly
reflects petitioner's entitlement to an investment tax credit.
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Background
Petitioner resided in Novi, Michigan, when he filed the
petition. This case is part of respondent's tax shelter
litigation project entitled "Scheer". The Scheer litigation
project involves a partnership organized to purchase and market
video tapes. By notice of deficiency dated February 18, 1988,
respondent determined deficiencies in, additions to, and
increased interest on petitioner's Federal income tax as
follows:1
Additions to Tax and Increased Interest
Year Deficiency Sec. 6653(a)(1) Sec. 6653(a)(2) Sec. 6659 Sec. 6621(c) Sec.
6661
1 2
1981 $ 6,435 $322 $1,844 ---
1 2
1982 11,245 562 2,885 $407
1 50% of the interest due on the deficiency.
2 120% of the interest payable under sec. 6601.
In the stipulation, petitioner agreed to be bound by the
test case entitled Pinto v. Commissioner, docket No. 17407-86.
This Court entered a decision in the Pinto case on January 18,
1995. The stipulation provides:
With respect to all adjustments in respondent's
notice of deficiency relating to the Scheer Project tax
shelter, more specifically, the limited partnership
entitled Richard II, Ltd., the parties stipulate to the
following terms of settlement:
1. THE ABOVE ADJUSTMENTS ARE THE ONLY ISSUES IN
THIS CASE WITH RESPECT TO ALL PARTIES;
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect during the years at issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
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2. The above adjustments, as specified in the
preamble, shall be redetermined by application of the
same formula as that which resolved the same tax
shelter adjustments with respect to the following
taxpayers:
Names: Melvin and Barbara Pinto
Tax Court Docket No.: 17407-86
(hereafter the CONTROLLING CASE)
3. All issues involving the above adjustments
shall be resolved as if the petitioners in this case
were the same as the taxpayers in the CONTROLLING CASE;
* * *
5. A decision shall be submitted in this case
when the decision in the CONTROLLING CASE (whether
litigated or settled) becomes final under I.R.C. §
7481;
* * *
The parties agree to this STIPULATION OF SETTLEMENT.
Respondent filed a motion for entry of decision with this
Court on October 24, 1995. Attached as an exhibit to said motion
was a decision document (the Document) that respondent claims to
be in accordance with the stipulation. By Order dated November
7, 1995, the Court directed petitioner to show cause why
respondent's above-referenced motion should not be granted.
Petitioner filed his response on December 15, 1995. He contends
that the notice of deficiency fails to account properly for an
investment tax credit.
By Order dated April 16, 1996, the Court directed respondent
to address petitioner's above-referenced response. On June 10,
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1996, respondent filed her response. Respondent contends that
her calculations account for the investment tax credit sought by
petitioner.
Discussion
Petitioner argues that the decision document prepared by
respondent fails properly to reflect an investment tax credit.
Respondent has satisfied the Court, however, that the decision
document properly reflects the particular adjustment sought by
petitioner. In light of petitioner's scant response to
respondent's motion for entry of decision, we agree with
respondent. The record indicates that respondent provided
petitioner with two proposed decision documents. Respondent
concedes that the first of these decision documents failed to
account for the credit sought by petitioner. The record
indicates, however, that the second decision document properly
accounts for the subject credit.
Respondent requests that the Court impose against petitioner
and his counsel a penalty pursuant to section 6673(a)(1) and (2).
In support of this request, respondent contends that petitioner
advanced arguments primarily for the purpose of delaying entry of
decision. In the exercise of our discretion, we shall not grant
respondent's request.
To reflect the foregoing,
An appropriate order will be issued
granting respondent's motion for
entry of decision, and decision
will be entered accordingly.